Oil down almost 1 percent on bets OPEC will not cut output
NEW YORK - Crude oil futures fell almost 1 percent on Tuesday on bets OPECwill not cut output to stem a supply glut when the world's biggest oil producers meet in Vienna later this week, although a rally in U.S. gasoline and a weak dollar limited...
NEW YORK - Crude oil futures fell almost 1 percent on Tuesday on bets OPEC will not cut output to stem a supply glut when the world's biggest oil producers meet in Vienna later this week, although a rally in U.S. gasoline and a weak dollar limited losses.
Traders and investors await a report later on Tuesday from industry group American Petroleum Institute, which could show a decline in U.S. oil stockpiles last week. The API report comes ahead of official inventory numbers due from the U.S. government on Wednesday.
Trading in crude was sluggish ahead of Friday's meeting of the Organization of the Petroleum Exporting Countries amid worries the group will choose to keep output high to defend market share against non-member oil producers such as the United States and Russia.
U.S. jobs data for November are also due on Friday, and likely to keep oil prices rangebound until then, traders said.
Stronger jobs numbers could help the Federal Reserve decide on the first U.S. rate hike in nearly a decade, sending the dollar higher. That, and the likelihood of no OPEC cuts, could drive oil even lower, possibly into the $35-a-barrel area.
"Markets are realising the weakness in the fundamentals and the potential for an absolute non-event (OPEC) on Friday, which has more possibility of putting prices down further," said Abhishek Deshpande, strategist for Natixis in London.
Brent crude futures <LCOc1> were down 41 cents, or 0.9 percent, at $44.21 a barrel by 1:33 p.m. EST.
U.S. crude's West Texas Intermediate futures <CLc1> traded down 15 cents at $41.50.
API will issue its report at 4:30 p.m., two hours after trading settles in Brent and WTI. Traders say crude prices could rebound if the group reports a drop in U.S. crude inventories. A Reuters poll of analysts have forecast a stock decline of 500,000 barrels.
U.S. gasoline futures <RBc1> traded near Monday's three-week highs, reacting to higher requirements for refiners to meet U.S. renewable fuel standards. The Environmental Protection Agency (EPA) on Monday raised its previous targets for the amount of biofuels to be mixed into motor fuel for the three years to 2016.
The gasoline crack <CL-RB1=R>, or an indicator of the profit for refining crude into the fuel, hit a three-month high above $15 a barrel.
The dollar headed for its biggest daily loss in nearly two weeks against a basket of currencies <.DXY>, making commodities denominated in the greenback, including oil, more affordable for holders of the euro and other currencies.